Inheritance and Wealth Transfer to Baby Boomers

The figures, drawn from national survey data, say the wealthiest Boomers will be given an average of $1.5 million, while those at the other end of the spectrum will be left $27,000, an amount that represents a larger percentage of the latter group’s overall wealth. Two-thirds of all Boomers stand to receive some inheritance over their lifetimes.

Key Findings

Most Boomers will receive their inheritances in late middle age, upon the death of the surviving parent. To date, the overwhelming majority of inheritances are passed from parents to children (63% of inheritances and 74% of dollars); grandparents are the second most common source.

Although only 17% of Boomers had received an inheritance by 2007, two-thirds will eventually receive one.

Considering only past inheritances, the median amount Boomers received by 2007—adjusted for inflation—is about the same as that received by the preceding 1927–1945 birth cohort at the same ages.

Methodology

Data were analyzed from the Survey of Consumer Finances (SCF), a triennial survey that oversamples wealthy households. SCF participants were asked about past receipts of inheritances and of inter-vivos gifts (those given during the donor’s lifetime). They were also asked whether they expect a substantial inheritance or transfer of assets in the future and the anticipated amount. For data on prospective inheritance receipts, the study relied on the 2006 Health and Retirement Study (HRS), a nationally representative panel of individuals born before 1954 and their spouses of any age. In 2006, individuals were asked to estimate the probability of receiving an inheritance in the next 10 years and the likely amount. The authors converted these 10-year forecasts into lifetime probabilities and assigned probabilities and amounts to SCF households born 1946–1964 to obtain a complete picture of past and prospective inheritance receipts for the Boomers.